A new machine, using a 3-year MACRS recovery period, can be purchased at a price of $140,000. It requires $10,000 to install and has a 3-year usable life. If the new machine is acquired, the investment in accounts receivable will be expected to rise by $10,000, the inventory investment will increase by $25,000, and accounts payable will increase by $15,000. Earnings before depreciation, interest, and taxes are expected to be $120,000 in the first year and $130,000 in the second and third years with the new machine. At the end of 3 years, the new machine could be sold for a net of $35,000 before taxes. The firm is subject to a 40% tax rate. a. Determine the initial investment associated with the proposed investment in new machine decision. b. Calculate the incremental operating cash flows for years 1 to 4 associated with the proposed new machine. c. Calculate the terminal cash flow associated with the proposed investment in new machine decision. (Note: This decision is made at the end of year 3.)